Aden and the Free Zone: Yemen’s Gateway to the World [Archives:1998/08/Business & Economy]

February 23 1998

Dr. Anwar Ali Shamsher

1- Aden, the Port & History
It has been interestingly noted that history repeats itself. This is almost true of the case of Aden at present. Aden has had an eventful historical development over the past 3000 years. Its fortunes reflects changes in trading methods and patterns, ship technology, the opening and closure of the Suez Canal (1869 and 1967 respectively) and of course the various and distinctively conflicting interests of the powers to be in the modern history of the world spanning backwards over 300 years.
The fortunes of Aden during its recent history has been directly connected to its famous Port. The opening of the Suez Canal in 1869 shortened the distance between London and Mumbay in India (Bombay until its name changed recently) from 10700 miles to 6270 miles giving a definite boost to the activities of the Port, accelerating its then ship coal bunkering and other related services. The modern Port of Aden became a fact in international trade on its establishment in 1888, a period of more than 100 years. In 1919 the Port started catering for oil bunkering services to ships due to change in ship technology. By consequence all related ship services increased. Thus by 1950, Aden became one of the world’s top ship bunkering ports handling almost 6300 ships each year, thereby attaining once again the status of a regional dhow, coastal and deep-sea traffic base. These positive trends are backed further through complementary economic activities such as:

. The Aden Refinery built in 1954/55 with an annual refining capacity of 8.3 million tons. Currently the Refinery is processing just under 5 million tons a year much of which comes from Yemen oil fields. The Refinery is due to under go complete rehabilitation including its electricity power generating capacity during the forthcoming three years.

. The National Dockyard Company, a public sector undertaking continues to provide Aden’s historically known ship repair services. Privatizing this undertaking is one of the measures being seriously studied. A joint venture set-up may result in a reputable major shipyard to operate the Dockyard. As a consequence it is expected that Classification Societies which were formerly based at Aden will find this new development very interesting and therefore re-establish their offices once again in Aden, expanding marine surveying and insurance services.
. The airport at Aden during the year 1998 and thereafter will be rehabilitated to meet the expected demand as a result of the operation of the new Aden container Terminal (ACT) and the Aden Industrial and Warehousing Estate (AIWE) – north shore of the Port ship movement which is now the general trend due to the operation of the present Maalla Container Terminal (south shore of the Port), which will result after the completion of the new projects mentioned, will require expansion of services for other regional ports, such as crew changing, the supply of spare parts for machinery, electrical and electronic items, ship stores etc. This will be an additional business opportunity.

. Sea – air cargo business is another venture which is directly connected with the establishment of the Aden Free Zone (AFZ). A cargo village is one of the projects which is part of the master plan of the AFZ. The success of the project will reflect a combination of the provision of facilities to be provided by the airport and an important strategic location which Aden provides. In this respect the Port is of course at the same distance by sea from Colombo as Dubai, but 1550 miles closer to Europe. A distinct advantage of location from a marketing point of view.
Overall Aden, its famous Port and the AFZ form a unique combination of a city moving ahead not only to catch up with lost time, but to take its rightful place in international trade and business opportunities and as Yemen’s gateway to the world. After years of untouched development opportunities, Aden is ready for the takeoff and will enter the next millennium challenging other ports for its rightful place as a major distribution center.

2- Aden Free Zone
Yemen, named Arabian Felix or fortunate Arabia by the ancient Greeks and Romans is located at Arabia’s southern most tip is the home of a thriving civilization and has trading history spanning thousands of years. Personal luxuries such as frankincense and myrrh were traded along the legendary spice trail through the center of Yemen. These valuable commodities were as precious to the ancient economy as oil is to the present. Therefore, to occupy once again a leading role in international trade and the world economy is nothing but natural to Yemen in general and Aden in particular. Historically, Aden was the first organized settlement and free port in the Middle, Near and Far East, established by Act No. (01) of 1850 by the then British authorities. The establishment of the present modern Port by Act no. (8) of 1888 has been mentioned previously. These two events in the modern history of Yemen and Aden clearly indicate the continued interest and importance of this strategically important area to the international community.

Aden has many advantages to offer ship owners, which helped in the past to make its famous Port a regional distribution center and will favor it in the future. It:
. is directly on the main round-the-world and the Far East to the Europe, America trade route, with a deviation of only 4 miles from this route to the pilot station;
. has clear approaches from waters 20-40 meters deep without reefs, well marked by aids to navigation;
. has a 4 mile pilotage to the berths from the fairway buoy (the legal boundary of the port);
. can provide deep water in one of the world’s largest natural harbors, protected from the prevailing easterly winds, a fine natural harbor with many square miles of sheltered water which forms an adequate protected space for expansion;
. operates for 365 days a year;
. is around 4570 miles from NE Europe and 3640 miles from Singapore.
. is well placed to provide transshipment services to East Africa, the Red Sea, the Indian Sub-Continent and the Gulf, and;
. enjoys a dry climate with temperatures of around 28 C through the winter and 38 C during the summer (Mary-August). Although Aden comes late to the trans-shipment business, there are certain advantages in this. The growth in ship size, changes in alliances between shipping companies and other changes in the pattern of international trade favor a terminal built specifically to serve the new generation of container ships which can offer a high standard of service mid-way between major production centers in Europe, America and the Far East. This issue is one of many which has been tackled by the establishment of the Yemen Free Zone Public Authority (YFZPA).